Why Housing Affordability Is Starting to Improve This Fall

For the past couple of years, many buyers have struggled to make the math work. Home prices climbed, mortgage rates spiked, and plenty of people pressed pause because it just didn’t feel doable. Maybe that was you.

Now, there’s finally some good news. If you’ve been waiting for a window to re-enter the market, this fall may bring the shift you’ve been hoping for.

The latest data from Redfin shows the typical monthly mortgage payment has been coming down, and is now about $290 lower than it was just a few months ago (see graph below):

Fresh data from Redfin shows affordability is starting to ease: the typical monthly mortgage payment has dropped—now averaging about $290 less than just a few months ago (see graph below).

Here’s what’s driving the shift; The cost of buying a home comes down to three main factors:

• Mortgage rates
• Home prices
• Your income

Right now, all three are finally trending in a better direction. That doesn’t mean buying suddenly feels easy at today’s numbers—but it does mean it’s less of an uphill climb than before.

1. Mortgage Rates

Mortgage rates have eased since earlier this year. Back in May, they averaged around 7%. Today, they’re closer to 6.3% (see graph below):

That might not sound like a huge shift, but it makes a real difference. Even a small drop in rates can lower your monthly payment. For example, on a $400,000 mortgage, today’s 6.3% rate means you’d pay about $190 less per month compared to when rates were at 7%—just from the rate change alone.

For many buyers, that savings is enough to bring homeownership back within reach. As Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explained on September 10^th:

“The downward rate movement spurred the strongest week of borrower demand since 2022 . . . Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace.”

2. Home Prices

After years of rapid appreciation, price growth has finally cooled. As Odeta Kushi, Deputy Chief Economist at First American, explains:

“National home price growth remains positive, but muted — low single digits — and we expect this trend to continue in the second half of the year.”

For buyers, that’s welcome news. Slower growth makes it easier to plan and budget. And in some areas, prices have even edged down slightly—opening the door to homes that may be more affordable than you expected.

3. Wages

The latest data from the Bureau of Labor Statistics (BLS) shows wages growing at nearly 4% annually. Lawrence Yun, Chief Economist at NAR, highlights why this matters:

“Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”

Put simply, paychecks are rising faster than home prices. That gap may be modest, but in today’s market, even small gains in income help tip the scales toward better affordability.

What This Means for You

With lower rates, cooling price growth, and rising wages, the math may finally be shifting in your favor this fall.

Affordability is still a challenge, but it’s noticeably better than it was just a few months ago. In fact, Redfin reports the typical monthly mortgage payment is already about $290 less than earlier this year. That extra breathing room could be the difference between waiting on the sidelines and moving forward.

Bottom Line

If you’ve been asking yourself whether it’s worth taking another look at buying, now’s the time to find out.

Sit down with a professional and re-run the numbers. Together, you can review your budget, see what’s shifted, and decide if this fall is the season to move from browsing listings to turning the key in your own front door.